Closing the doors on Myer penalties

RETAIL giant Myer is set to close some of its stores on Sundays because it cannot afford to pay penalty rates.

Chief executive Bernie Brookes said the reintroduction of penalty rates under the Fair Work Act would make opening some stores uneconomic and consumers who liked to shop on weekends and at night would pay the price.

"There's no doubt that, going forward as the Fair Work Act is fully in play by March 2014, there will be some stores that will open a lot less on a Sunday," Mr Brookes said.

"Some may not open at all, some will trade less hours (and) we will be closing stores earlier because with 200 per cent penalty rates on various days it becomes impractical."

Mr Brookes said retailers would be forced to pay staff up to double their usual wage under the changes at a time the rest of the world was moving to scrap penalty rates.

The reduction in trading hours would lead to job losses as well.

"There ain't going to be a lot of casual jobs for uni students and school kids now if you have to pay them 200 per cent so the world is going to change for retail under the Fair Work Act," he said.

Wage costs grew by 5 to 6 per cent over the last year and were forecast to increase by the same amount over the next 12 months. The reintroduction of penalty rates would make matters worse for the struggling sector, he said.

"It's going to do nothing else but make us uncompetitive on a world scale," he said. "(Wage costs are) the single most significant problem facing retail."

Myer unveiled a 12.7 per cent slump in net profit to $139.4 million last financial year. Sales also fell but only by 1.3 per cent to $3.1 billion, compared to the previous corresponding period.

His warning that shops could close early contradicted his earlier briefing when he said longer trading hours had been part of successful strategy to win back consumers.